Orion S.A. (NYSE: OEC), a specialty chemical company, today
announced financial results for period ended June 30, 2024 as
follows:
Second Quarter 2024
Highlights
- Net sales of $477.0 million, up $18.2 million, year over
year
- Net income of $20.5 million, down $9.6 million, year over
year
- Diluted EPS of $0.35, down $0.16, year over year
- Adjusted EBITDA1 of $75.1 million, down 14%, year over
year
- Adjusted Diluted EPS1 of $0.41, down $0.12, year over
year
Six Months 2024
Highlights
- Net sales of $979.9 million, up $20.4 million, year over
year
- Net income of $47.2 million, down $25.2 million, year over
year
- Diluted EPS of $0.80, down $0.40, year over year
- Adjusted EBITDA1 of $160.4 million, down 15%, year over
year
- Adjusted Diluted EPS1 of $0.93, down $0.34, year over
year
1 The reconciliations of Non-U.S. GAAP
(“GAAP”) measures to the respective most comparable GAAP measures
are provided in the section titled Reconciliation of Non-GAAP
Financial Measures below.
“Orion executed against a more challenging than contemplated
backdrop in the second quarter of 2024, including softer Rubber
segment demand and mixed macro trends globally. Still, our
Specialty segment’s ongoing earnings recovery is encouraging,
including strong double-digit volume growth and our Rubber
segment’s profitability remained relatively steady. Bigger picture,
we remain confident in the durability of the industry’s improved
fundamentals, Orion-specific initiatives and the company’s
medium-term earnings trajectory,” stated Corning Painter, Orion’s
Chief Executive Officer.
“Considering our financial position, supportive industry
fundamentals, ongoing plant investments and confidence in our
prospects into 2025 and beyond, we will resume opportunistic stock
buyback activity starting in the third quarter of 2024,” continued
Painter. “Responsible and balanced capital allocation remains a key
strategic consideration for Orion management and its Board.
Considering diminishing growth capital plans over the next two
years, we have the capacity for share repurchases, which represent
a prudent use of excess capital.”
Jeff Glajch, Orion’s Chief Financial Officer added, “the optics
of our quarterly comparison were again impacted by unusually high
co-generation earnings in the prior year period. Additionally, we
continued to see weaker Rubber volume in the second quarter of
2024. For the second half of 2024, we expect to see better
profitability, despite the continuing softness of the Rubber
market, thanks to improved plant utilization. Regarding the
resumption of buybacks: we are comfortable with our current
absolute net debt level and we believe our net leverage ratio is
set to decline next year with continued EBITDA growth and better
free cash flow.”
Second Quarter 2024 Overview:
(In millions, except volume, per metric
ton and EPS data)
Q2 2024
Q2 2023
Y/Y Change
Y/Y Change in %
Volume (kmt)
233.1
227.3
5.8
2.6
%
Net sales
477.0
458.8
18.2
4.0
%
Gross profit
109.8
117.1
(7.3
)
(6.2
)%
Gross profit per metric ton(1)
471.0
515.2
(44.2
)
(8.6
)%
Income from operations
41.6
58.9
(17.3
)
(29.4
)%
Net income
20.5
30.1
(9.6
)
(31.9
)%
Adjusted net income(1)
24.5
31.5
(7.0
)
(22.2
)%
Adjusted EBITDA(1)
75.1
87.3
(12.2
)
(14.0
)%
Basic EPS
0.35
0.51
(0.16
)
(31.4
)%
Diluted EPS
0.35
0.51
(0.16
)
(31.4
)%
Adjusted Diluted EPS(1)
0.41
0.53
(0.12
)
(22.6
)%
(1) The reconciliations of Non-U.S. GAAP
(“GAAP”) measures to the respective most comparable GAAP measures
are provided in the section titled Reconciliation of Non-GAAP
Financial Measures below.
Volume increased by 5.8 kmt, year over year due to higher volume
in Specialty Carbon Black segment.
Net sales increased by $18.2 million, or 4.0%, year over year,
driven primarily by higher volume in Specialty Carbon Black
segment, the pass-through effect from higher oil prices and
improved contractual pricing. Those were partially offset by
unfavorable currency translation.
Gross profit decreased by $7.3 million, or 6.2%, to $109.8
million, year over year. The decrease was driven primarily by
favorable impact from the pass-through of raw material costs in the
prior year, higher fixed costs and lower cogeneration.
Income from operations decreased by $17.3 million, or 29.4%, to
$41.6 million, year over year. The decrease was driven primarily by
favorable impact from the pass-through of raw material costs in the
prior year, higher fixed costs and lower cogeneration. Those were
partially offset by higher Specialty Carbon Black volume and
improved contractual pricing.
Adjusted EBITDA decreased by $12.2 million, or 14.0%, to $75.1
million, year over year, impacted by the same factors as income
from operations.
Quarterly Business Segment
Results
SPECIALTY CARBON BLACK
(In millions, except volume and per
metric ton data)
Q2 2024
Q2 2023
Y/Y Change
Y/Y Change in %
Volume (kmt)
62.9
53.6
9.3
17.4
%
Net sales
165.5
149.5
16.0
10.7
%
Gross profit
39.5
42.6
(3.1
)
(7.3
)%
Gross profit per metric ton
628.0
794.8
(166.8
)
(21.0
)%
Adjusted EBITDA
28.0
29.9
(1.9
)
(6.4
)%
Adjusted EBITDA/metric ton
445.2
557.8
(112.6
)
(20.2
)%
Adjusted EBITDA margin (%)
16.9
%
20.0
%
(310)bps
(15.5
)%
Specialty Carbon Black segment volume increased by 9.3 kmt, or
17.4%, year over year due to volume recovery across all regions and
end markets.
Net sales rose by $16.0 million, or 10.7%, to $165.5 million,
year over year, primarily due to higher volume across all
regions.
Adjusted EBITDA declined by $1.9 million, or 6.4%, to $28.0
million, year over year. The decrease was primarily due to
favorable impact from the pass-through of raw material costs in the
prior year and lower cogeneration, partially offset by higher
volume.
Year over year, Adjusted EBITDA per ton decreased by $112.6 or
20.2%, to $445.2.
Year over year, Adjusted EBITDA margin decreased 310 basis
points to 16.9%.
RUBBER CARBON BLACK
(In millions, except volume and per
metric ton data)
Q2 2024
Q2 2023
Y/Y Change
Y/Y Change in %
Volume (kmt)
170.2
173.7
(3.5
)
(2.0
)%
Net sales
311.5
309.3
2.2
0.7
%
Gross profit
70.3
74.5
(4.2
)
(5.6
)%
Gross profit per metric ton
413.0
428.9
(15.9
)
(3.7
)%
Adjusted EBITDA
47.1
57.4
(10.3
)
(17.9
)%
Adjusted EBITDA/metric ton
276.7
330.5
(53.8
)
(16.3
)%
Adjusted EBITDA margin (%)
15.1
%
18.6
%
(350)bps
(18.8
)%
Rubber Carbon Black segment volume declined by 3.5 kmt, or 2.0%,
year over year due to lower demand in Americas and Asia.
Net sales increased by $2.2 million, or 0.7%, to $311.5 million,
year over year.
Adjusted EBITDA declined by $10.3 million, or 17.9%, to $47.1
million, year over year. The decrease was driven primarily by
higher fixed costs, favorable impact from the pass-through of raw
material costs in the prior year and lower cogeneration, partially
offset by higher volume in Europe and improved contractual
pricing.
Year over year, Adjusted EBITDA per ton decreased by $53.8, or
16.3% to $276.7.
Adjusted EBITDA margin decreased 350 basis points to 15.1%.
Six Months 2024
Highlights
Six Months Ended June
30,
Year-Over Year
(In millions, except volume, per metric
ton and EPS data)
2024
2023
Delta
Volume (kmt)
481.5
460.8
20.7
4.5
%
Net sales
979.9
959.5
20.4
2.1
%
Gross profit
232.0
253.5
(21.5
)
(8.5
)%
Gross profit per metric ton(1)
481.8
550.1
(68.3
)
(12.4
)%
Income from operations
94.4
132.4
(38.0
)
(28.7
)%
Net income
47.2
72.4
(25.2
)
(34.8
)%
Adjusted net income(1)
55.3
76.6
(21.3
)
(27.8
)%
Adjusted EBITDA(1)
160.4
188.4
(28.0
)
(14.9
)%
Basic EPS
0.81
1.21
(0.40
)
(33.3
)%
Diluted EPS
0.80
1.20
(0.40
)
(33.3
)%
Adjusted Diluted EPS(1)
0.93
1.27
(0.34
)
(26.8
)%
(1) The reconciliations of these non-GAAP
measures to the respective most comparable GAAP measures are
provided in the section titled Reconciliation of non-GAAP Financial
Measures.
Volume increased by 20.7 kmt to 481.5 kmt compared to the six
months ended June 30, 2023, primarily due to higher volume in
Specialty Carbon Black segment.
Net sales increased by $20.4 million, or 2.1%, in the six months
ended June 30, 2024 to $979.9 million, year over year, primarily
driven by higher volume in Specialty Carbon Black segment and
improved contractual pricing. This was partially offset by the
pass-through effect of lower raw material costs and lower
cogeneration.
Gross profit decreased by $21.5 million, or 8.5%, to $232.0
million, and gross profit per metric ton decreased by 12.4% to
$481.8 year over year. The decrease was primarily driven by higher
fixed costs, favorable impact from the pass-through of raw material
costs in the prior year and lower cogeneration.
Income from operations decreased by 38.0, or 28.7%, to 94.4,
year over year, driven primarily by higher fixed costs, favorable
impact from the pass-through of raw material costs in the prior
year. Those were partially offset by higher Specialty Carbon Black
volume and improved contractual pricing.
Adjusted EBITDA decreased by $28.0 million, or 14.9%, from
$188.4 million in the six months ended June 30, 2023 to $160.4
million in the six months ended June 30, 2024. The decrease was
driven by the same factors as income from operations.
Six Months
Business Segment Results
SPECIALTY CARBON BLACK
Six Months Ended June
30,
(In millions, except volume and per
metric ton data)
2024
2023
Delta
Volume (kmt)
126.2
106.6
19.6
18.4
%
Net sales
336.4
311.5
24.9
8.0
%
Gross profit
81.2
94.7
(13.5
)
(14.3
)%
Gross profit per metric ton
643.4
888.4
(245.0
)
(27.6
)%
Adjusted EBITDA
55.9
67.2
(11.3
)
(16.8
)%
Adjusted EBITDA/metric ton
442.9
630.4
(187.5
)
(29.7
)%
Adjusted EBITDA margin (%)
16.6
%
21.6
%
(500)bps
(23.1
)%
Volumes increased by 19.6 kmt, or 18.4% year over year, to 126.2
kmt for the six months ended June 30, 2024, primarily due to volume
recovery across all regions and end markets.
Net sales increased by $24.9 million, or 8.0%, year over year,
to $336.4 million for the six months ended June 30, 2024, primarily
due to higher volume across all regions.
Adjusted EBITDA decreased by $11.3 million, or 16.8%, year over
year, to $55.9 million for the six months ended June 30, 2024. The
decrease was primarily due to favorable impact from the
pass-through of raw material costs in the prior year and higher
fixed costs, partially offset by higher volume.
Year over year, Adjusted EBITDA per ton decreased by $187.5 or
29.7%, to $442.9.
Adjusted EBITDA margin decreased by 500 basis points, year over
year, to 16.6% for the six months ended June 30, 2024.
RUBBER CARBON BLACK
Six Months Ended June
30,
(In millions, except volume and per
metric ton data)
2024
2023
Delta
Volume (kmt)
355.3
354.2
1.1
0.3
%
Net sales
643.5
648.0
(4.5
)
(0.7
)%
Gross profit
150.8
158.8
(8.0
)
(5.0
)%
Gross profit per metric ton
424.4
448.3
(23.9
)
(5.3
)%
Adjusted EBITDA
104.5
121.2
(16.7
)
(13.8
)%
Adjusted EBITDA/metric ton
294.1
342.2
(48.1
)
(14.1
)%
Adjusted EBITDA margin (%)
16.2
%
18.7
%
(250)bps
(13.4
)%
Volume increased by 1.1 kmt, or 0.3%, year over year, to 355.3
kmt, for the six months ended June 30, 2024.
Net sales decreased by $4.5 million, or 0.7%, year over year, to
$643.5 million for the six months ended June 30, 2024.
Adjusted EBITDA decreased by $16.7 million, or 13.8%, to $104.5
million for the six months ended June 30, 2024. The decrease was
driven primarily by higher fixed costs, favorable impact from the
pass-through of raw material costs in the prior year, reduced
volume in Americas and lower cogeneration, partially offset by
higher volume in Europe and improved contractual pricing.
Year over year, Adjusted EBITDA per ton decreased by $48.1 or
14.1%, to $294.1.
For the six months ended June 30, 2024, Adjusted EBITDA margin
decreased 250 basis points to 16.2%, year over year.
Debt
As of June 30, 2024, the company’s net debt was $803.5 million,
up $22.8 million from the end of 2023 and net debt to adjusted
EBITDA ratio was 2.64 times.
Outlook
“We are revising our 2024 guidance for the year of an Adjusted
EBITDA range of $315 million to $330 million and an Adjusted
Diluted EPS range of $1.75 per share to $1.95 per share. Free cash
flow should be $0 to $25 million this year. For planning purposes,
and given considerable macro uncertainty, we are not anticipating
any meaningful economic improvement over the balance of 2024,” Mr.
Painter concluded.
Conference Call
As previously announced, Orion will hold a conference call
tomorrow, Friday, August 2, 2024, at 8:30 a.m. (EDT). The dial-in
details for the live conference call are as follows:
U.S. Toll Free:
1-877-407-4018
International:
1-201-689-8471
A replay of the conference call may be accessed by phone at the
following numbers to Friday, August 9, 2024:
U.S. Toll Free:
1-844-512-2921
International:
1-412-317-6671
Conference ID:
13743654
Additionally, an archived webcast of the conference call will be
available on the investor section of the company’s website at
www.orioncarbons.com.
To learn more about Orion S.A., visit the company’s investor
website at www.orioncarbons.com, where we regularly post
information including notification of events, news, financial
performance, investor presentations and webcasts, non-GAAP
reconciliations, SEC filings and other information regarding our
company, its businesses and the markets it serves.
About Orion S.A.
Orion S.A. (NYSE: OEC) is a leading global supplier of carbon
black, a solid form of carbon produced as powder or pellets. The
material is made to customers’ exacting specifications for tires,
coatings, ink, batteries, plastics and numerous other specialty,
high-performance applications. Carbon black is used to tint,
colorize, provide reinforcement, conduct electricity, increase
durability, and add UV protection. Orion has innovation centers on
three continents and produces carbon black at 15 plants worldwide,
offering the most diverse variety of production processes in the
industry. The company’s corporate lineage goes back more than 160
years to Germany, where it operates the world’s longest-running
carbon black plant. Orion is a leading innovator, applying a deep
understanding of customers’ needs to deliver sustainable solutions.
For more information, please visit www.orioncarbons.com.
Cautionary Statement for the Purposes of the “Safe Harbor”
Provisions of the Private Securities Litigation Reform Act of
1995
This document contains and refers to certain forward-looking
statements with respect to our financial condition, results of
operations and business, including those in the “Outlook ” and
“Quarterly Business Segment Results” sections above. These
statements constitute forward-looking statements within the meaning
of Section 21E of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”). Forward-looking statements are statements of
future expectations that are based on management’s current
expectations and assumptions and involve known and unknown risks
and uncertainties that could cause actual results, performance or
events to differ materially from those expressed or implied in
these statements. You should not place undue reliance on
forward-looking statements. Forward-looking statements include,
among others, statements concerning the potential exposure to
market risks, statements expressing management’s expectations,
beliefs, estimates, forecasts, projections and assumptions and
statements that are not limited to statements of historical or
present facts or conditions. Forward-looking statements are
typically identified by words such as “anticipate,” "assume,"
“assure,” “believe,” “confident,” “could,” “estimate,” “expect,”
“intend,” “may,” “plan,” “objectives,” “outlook,” “probably,”
“project,” “will,” “seek,” “target” “to be,” and other words of
similar meaning.
These forward-looking statements include, without limitation,
statements about the following matters: • our outlook and
expectations for 2024 and 2025, including with respect to
profitability, plant utilization, net leverage, EBITDA growth and
free cash flow; • share repurchases; • growth and strategies; •
supply; • customer actions, behavior and demand for our products; •
macroeconomic conditions; and • expectations and plans with respect
to our capital, including investments and potential returns to our
shareholders.
All these forward-looking statements are based on estimates and
assumptions that, although believed to be reasonable, are
inherently uncertain. Therefore, undue reliance should not be
placed upon any forward-looking statements. There are important
factors that could cause actual results to differ materially from
those contemplated by such forward-looking statements. These
factors include, among others: • possible negative or uncertain
worldwide economic conditions and developments; • the volatility
and cyclicality of the industries in which we operate; • the
operational risks inherent in chemicals manufacturing, including
disruptions due to technical facilities, severe weather conditions
or natural disasters; • our dependence on major customers and
suppliers; • unanticipated fluctuations in demand for our products,
including due to factors beyond our control; • our ability to
compete in the industries and markets in which we operate; •
changes in the nature of transportation in the future, which may
impact our customers and our business; • our ability to
successfully develop new products and technologies; • the
availability of substitutes for our products; • our ability to
implement our business strategies; • our ability to respond to
changes in feedstock prices and quality; • our ability to realize
benefits from investments, joint ventures, acquisitions or
alliances; our ability to negotiate satisfactory terms with
counterparties, the satisfactory performance by such counterparties
of their obligations to us, as well as our ability to meet our
performance obligations towards such counterparties; • our ability
to realize benefits from planned plant capacity expansions and
planned and current site development projects, including our
conductive additives facility at La Porte, Texas, and the impacts
of potential delays to such expansions and development projects; •
any information technology systems failures, network disruptions
and breaches of data security; • our relationships with our
workforce, including negotiations with labor unions, strikes and
work stoppages; • our ability to recruit or retain key management
and personnel; • our exposure to political or country risks
inherent in doing business globally; • any and all impacts from the
Russia-Ukraine war and the Hamas-Israel conflict and/or any
escalation thereof related energy costs, raw material availability
or other economic disruptions; • geopolitical events in the United
States (“U.S.”), Middle-East, European Union (“EU”) and China,
relations amongst Western countries and their neighbors as well as
future relations between the U.S., EU, China and other countries
and organizations; • all environmental, health and safety laws and
regulations, including nanomaterial and greenhouse gas emissions
regulations, and the related costs of maintaining compliance and
addressing liabilities; • any possible future investigations and
enforcement actions by governmental, supranational agencies or
other organizations; • our operations as a company in the chemical
sector, including the related risks of leaks, fires and toxic
releases as well as other accidents; • any market and regulatory
changes that may affect our ability to sell or otherwise benefit
from co-generated energy; • any litigation or legal proceedings,
including product liability, environmental or asbestos related
claims; • our ability to protect our intellectual property rights
and know-how; • our ability to generate the funds required to
service our debt and finance our operations; • any fluctuations in
foreign currency exchange and interest rates; • the availability
and efficiency of hedging; • any changes in international and local
economic conditions, dislocations in credit and capital markets and
inflation or deflation; • any potential impairments or write-offs
of certain assets; • any required increases in our pension fund or
retirement-related contributions; • the adequacy of our insurance
coverage; • any changes in our jurisdictional earnings mix or in
the tax laws or accepted interpretations of tax laws in those
jurisdictions; • any challenges to our decisions and assumptions in
assessing and complying with our tax obligations; • the potential
difficulty in obtaining or enforcing judgments or bringing legal
actions against Orion S.A. (a Luxembourg incorporated entity) in
the U.S. or elsewhere outside Luxembourg; and • any current or
future changes to disclosure requirements and obligations,
including but not limited to new ESG-related disclosures, related
audit requirements and our ability to comply with such obligations
and requirements.
Factors that could cause our actual results to differ materially
from those expressed or implied in such forward-looking statements
include those factors detailed under the captions “Cautionary
Statement for Purposes of the “Safe Harbor” Provisions of the
Private Securities Litigation Reform Act of 1995” and “Risk
Factors” in our Annual Report in Form 10-K for the year ended
December 31, 2023 and in Note Q. Commitments and Contingencies to
our audited Consolidated Financial Statements and in Note J.
Commitments and Contingencies to our unaudited Consolidated
Financial Statements Form 10-Q for the period ended June 30, 2024.
It is not possible for our management to predict all risk factors
and uncertainties, nor can we assess the impact of all factors on
our business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those
contained in any forward-looking statements. We undertake no
obligation to publicly update or revise any forward-looking
statement as a result of new information, future events or other
information, other than as required by applicable law.
Reconciliation of Non-GAAP Financial Measures
We present certain financial measures that are not prepared in
accordance with GAAP or the accounting standards of any other
jurisdiction and may not be comparable to other similarly titled
measures of other companies. For a reconciliation of these non-GAAP
financial measures to their nearest comparable GAAP measures, see
section Reconciliation of Non-GAAP Financial Measures below.
These non-GAAP measures include, but are not limited to, Gross
profit per metric ton, Adjusted EBITDA, Net Working Capital,
Capital Expenditures, Segment Adjusted EBITDA Margin (in
percentage), Net debt and Net leverage.
We define Gross profit per metric ton as Gross profit divided by
volume measured in metric tons. We define Adjusted EBITDA as Income
from operations before depreciation and amortization, stock-based
compensation, and non-recurring items (such as, restructuring
expenses, legal settlement gain, etc.) plus Earnings in affiliated
companies, net of tax. We definite Net Working Capital as
Inventories, net plus Accounts receivable, net minus Accounts
payable. We define Capital Expenditures as Cash paid for the
acquisition of intangible assets and property, plant and equipment.
We define Segment Adjusted EBITDA Margin (in percentage) as Segment
Adjusted EBITDA divided by segment revenue. We define Net debt as
Total debt per Consolidated Balance Sheets plus Deferred debt
issuance cost - Term loans minus Cash and cash equivalents. We
define Net leverage as Net debt divided by trailing twelve month
Adjusted EBITDA.
Adjusted EBITDA is used by our chief operating decision maker
(“CODM”) to evaluate our operating performance and to make
decisions regarding allocation of capital, because it excludes the
effects of items that have less bearing on the performance of our
underlying core business. We use this measure, together with other
measures of performance under GAAP, to compare the relative
performance of operations in planning, budgeting and reviewing our
business. By eliminating potential differences in results of
operations between periods caused by factors such as depreciation
and amortization, historic cost and age of assets, financing and
capital structures and taxation positions or regimes, we believe
that Adjusted EBITDA provides a useful additional basis for
evaluating and comparing the current performance of the underlying
operations.
We believe our non-GAAP measures are useful measures of
financial performance in addition to Net income, Income from
operations and other profitability measures under GAAP, because
they facilitate operating performance comparisons from period to
period. In addition, we believe these non-GAAP measures aid
investors by providing additional insight into our operational
performance and help clarify trends affecting our business.
Other companies and analysts may calculate non-GAAP financial
measures differently, so making comparisons among companies on this
basis should be done carefully. Non-GAAP measures are not
performance measures under GAAP and should not be considered in
isolation or construed as substitutes for Net sales, Net income,
Income from operations, Gross profit and other GAAP measures as an
indicator of our operations in accordance with GAAP.
With respect to Adjusted EBITDA and Adjusted Diluted EPS outlook
for 2024, we are not able to reconcile the forward-looking non-GAAP
financial measures to the closest corresponding GAAP measure
without unreasonable efforts because we are unable to predict the
ultimate outcome of certain significant items. These items include,
but are not limited to, significant legal settlements, tax and
regulatory reserve changes, restructuring costs and acquisition and
financing related impacts.
Reconciliation of Non-GAAP to GAAP Financial
Measures
The following tables present a reconciliation of each of
Adjusted EBITDA and Adjusted Diluted EPS to the most directly
comparable GAAP measure:
Reconciliation of Net income to Adjusted
EBITDA:
Second Quarter
Six Months Ended June
30,
(In millions)
2024
2023
2024
2023
Net income
$
20.5
$
30.1
$
47.2
$
72.4
Add back Income tax expense
9.1
17.8
22.6
36.1
Add back Equity in earnings of affiliated
companies, net of tax
(0.2
)
(0.2
)
(0.3
)
(0.3
)
Income before earnings in affiliated
companies and income taxes
29.4
47.7
69.5
108.2
Add back Interest and other financial
expense, net
12.2
13.5
24.9
28.7
Add back Reclassification of actuarial
gain from AOCI
—
(2.3
)
—
(4.5
)
Income from operations
41.6
58.9
94.4
132.4
Add back Depreciation of property, plant
and equipment and amortization of intangible assets and right of
use assets
30.3
27.2
59.2
52.9
EBITDA
71.9
86.1
153.6
185.3
Equity in earnings of affiliated
companies, net of tax
0.2
0.2
0.3
0.3
Long term incentive plan
3.0
2.6
6.5
4.7
Other adjustments
—
0.6
—
0.3
Adjusted EBITDA
$
75.1
$
87.3
$
160.4
$
188.4
Reconciliation of Gross profit per metric
ton:
Second Quarter
Six Months Ended June
30,
(In millions, unless otherwise
indicated)
2024
2023
2024
2023
Net sales
$
477.0
$
458.8
$
979.9
$
959.5
Cost of sales
(367.2
)
(341.7
)
(747.9
)
(706.0
)
Gross profit
$
109.8
$
117.1
$
232.0
$
253.5
Volume (in kmt)
233.1
227.3
481.5
460.8
Gross profit per metric ton
$
471.0
$
515.2
$
481.8
$
550.1
Reconciliation of total debt per the
Consolidated Balance Sheet to Net debt:
(In millions)
June 30, 2024
Current portion of long term debt and
other financial liabilities
$
173.6
Long-term debt, net
660.7
Total debt as per Consolidated Balance
Sheets
834.3
Add: Deferred debt issuance costs - Term
loans
3.4
Less: Cash and cash equivalents
34.2
Net debt
$
803.5
Reconciliation of Net income to Adjusted
net income and Diluted EPS to Adjusted Diluted EPS:
Second Quarter
Six Months Ended June
30,
(In millions, except per share
data)
2024
2023
2024
2023
Net income
$
20.5
$
30.1
$
47.2
$
72.4
add back long-term incentive plan
3.0
2.6
6.5
4.7
add back other adjustment items
—
(1.6
)
—
(1.9
)
add back reclassification of actuarial
gains from AOCI
—
(2.3
)
—
(4.5
)
add back intangible assets
amortization
1.8
1.8
3.6
3.6
add back foreign exchange rate impacts
0.4
0.9
0.7
3.0
add back amortization of transaction
costs
0.4
0.7
0.8
1.3
Tax effect on add back items at estimated
tax rate
(1.6
)
(0.7
)
(3.5
)
(2.0
)
Adjusted net income
$
24.5
$
31.5
$
55.3
$
76.6
Total add back items
$
4.0
$
1.4
$
8.1
$
4.2
Impact of add-back items per share
$
0.06
$
0.02
$
0.13
$
0.07
Diluted EPS
$
0.35
$
0.51
$
0.80
$
1.20
Adjusted Diluted EPS
$
0.41
$
0.53
$
0.93
$
1.27
Condensed Consolidated
Statements of Operations (Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
(In millions, except share and per
share data)
2024
2023
2024
2023
Net sales
$
477.0
$
458.8
$
979.9
$
959.5
Cost of sales
367.2
341.7
747.9
706.0
Gross profit
109.8
117.1
232.0
253.5
Selling, general and administrative
expenses
60.3
55.0
121.8
112.7
Research and development costs
6.5
5.9
13.1
12.1
Other (income) expenses, net
1.4
(2.7
)
2.7
(3.7
)
Income from operations
41.6
58.9
94.4
132.4
Interest and other financial expense,
net
12.2
13.5
24.9
28.7
Reclassification of actuarial gain from
AOCI
—
(2.3
)
—
(4.5
)
Income before earnings in affiliated
companies and income taxes
29.4
47.7
69.5
108.2
Income tax expense
9.1
17.8
22.6
36.1
Earnings in affiliated companies, net of
tax
0.2
0.2
0.3
0.3
Net income
$
20.5
$
30.1
$
47.2
$
72.4
Weighted-average shares outstanding (in
thousands):
Basic
58,388
59,012
58,514
59,646
Diluted
59,185
59,510
59,229
60,085
Earnings per share:
Basic
$
0.35
$
0.51
$
0.81
$
1.21
Diluted
$
0.35
$
0.51
$
0.80
$
1.20
Condensed Consolidated
Statements of Financial Position (Unaudited)
(In millions, except share
amounts)
June 30, 2024
December 31, 2023
ASSETS
Current assets
Cash and cash equivalents
$
34.2
$
37.5
Accounts receivable, net
272.2
241.0
Inventories, net
284.5
287.1
Income tax receivables
9.2
6.1
Prepaid expenses and other current
assets
77.8
74.4
Total current assets
677.9
646.1
Property, plant and equipment, net
919.5
900.1
Right-of-use assets
123.6
110.6
Goodwill
73.7
76.1
Intangible assets, net
22.5
25.5
Investment in equity method affiliates
5.0
5.1
Deferred income tax assets
44.2
30.0
Other assets
42.4
39.9
Total non-current assets
1,230.9
1,187.3
Total assets
$
1,908.8
$
1,833.4
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable
$
186.2
$
183.7
Current portion of long-term debt and
other financial liabilities
173.6
137.0
Accrued liabilities
38.3
41.7
Income taxes payable
30.2
34.2
Other current liabilities
61.0
43.7
Total current liabilities
489.3
440.3
Long-term debt, net
660.7
677.3
Employee benefit plan obligation
59.8
60.4
Deferred income tax liabilities
75.1
66.3
Other liabilities
120.0
110.6
Total non-current liabilities
915.6
914.6
Stockholders' Equity
Common stock
Authorized: 65,035,579 and 65,035,579
shares with no par value
Issued – 60,992,259 and 60,992,259 shares
with no par value
Outstanding – 58,356,621 and 57,898,772
shares
85.3
85.3
Treasury stock, at cost, 2,635,638 and
3,093,487
(62.7
)
(70.1
)
Additional paid-in capital
76.2
85.6
Retained earnings
461.2
417.6
Accumulated other comprehensive loss
(56.1
)
(39.9
)
Total stockholders' equity
503.9
478.5
Total liabilities and stockholders'
equity
$
1,908.8
$
1,833.4
Condensed Consolidated
Statements of Cash Flows (Unaudited)
Six Months Ended June
30,
(In millions)
2024
2023
Cash flows from operating
activities:
Net income
$
47.2
$
72.4
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation of property, plant and
equipment and amortization of intangible assets and right of use
assets
59.2
52.9
Amortization of debt issuance costs
0.8
1.3
Share-based compensation
6.5
4.7
Deferred tax provision
(6.0
)
1.4
Foreign currency transactions
0.3
4.9
Reclassification of actuarial gain from
AOCI
—
(4.5
)
Other operating non-cash items, net
—
(0.5
)
Gain/loss on disposal of assets
—
—
Changes in operating assets and
liabilities, net:
Trade receivables
(39.3
)
99.0
Inventories
(5.4
)
6.2
Trade payables
5.1
(8.3
)
Other provisions
(0.7
)
(9.3
)
Income tax liabilities
(3.0
)
(7.4
)
Other assets and liabilities, net
(3.0
)
(6.6
)
Net cash provided by operating
activities
61.7
206.2
Cash flows from investing
activities:
Acquisition of property, plant and
equipment
(87.8
)
(69.1
)
Net cash used in investing
activities
(87.8
)
(69.1
)
Cash flows from financing
activities:
Proceeds from long-term debt
borrowings
—
7.8
Repayments of long-term debt
(2.1
)
(1.5
)
Payments for debt issue costs
(0.2
)
(0.2
)
Cash inflows related to current financial
liabilities
115.9
85.6
Cash outflows related to current financial
liabilities
(80.9
)
(160.4
)
Dividends paid to shareholders
(2.4
)
(2.5
)
Repurchase of common stock
(6.8
)
(49.5
)
Net cash provided by (used in)
financing activities
23.5
(120.7
)
Increase (decrease) in cash, cash
equivalents and restricted cash
(2.6
)
16.4
Cash, cash equivalents and restricted cash
at the beginning of the period
40.2
63.4
Effect of exchange rate changes on
cash
(1.8
)
0.1
Cash, cash equivalents and restricted
cash at the end of the period
35.8
79.9
Less restricted cash at the end of the
period
1.6
2.6
Cash and cash equivalents at the end of
the period
$
34.2
$
77.3
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240801330142/en/
Christopher Kapsch Vice President of Investor Relations +1
281-318-4413 christopher.kapsch@orioncarbons.com
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